Dow chief urges energy policy rethink

Dow Chemical CEO Andrew Liveris said the resurgent US economy is largely due to its competitive domestic gas market.
Photo: Rob Homer

by
Ayesha de Kretser

Dow Chemical boss Andrew Liveris has repeated his call for Australia to revise its energy policy, highlighting the success of US manufacturing being driven by access to cheap gas.

Australian-born Mr Liveris, who was the co-chairman of the Obama administration’s manufacturing task force, told the ABC’s Inside Business program on Sunday that more than $US80 billion would be invested in the US industry with a million new jobs created over the next five to seven years.

“That is nothing short of a renaissance in American manufacturing and all because we now have a domestic gas sector that’s very competitive," he said.

While Mr Liveris stopped short of calling for a domestic reservation policy to match that in the US, he said Australia had created a “de facto export reservation system" that allowed a few oil and gas companies to benefit at the expense of the rest of the country.

“I think that means that the Australian economy is going to be bereft of the value-add for decades to come," he said.

“I would say that Australia has the intelligence and hopefully has the, if you like, the drive to let Aust­ralians benefit through job creation and job diversification from the wonderful gift that we have called abundant natural gas and shale gas."

Big Australian energy users Alcoa and Incitec Pivot have asked whether the federal government should intervene to ensure domestic users are not forced to pay higher prices as energy companies target offshore sales into more lucrative Asian markets.

But Santos chief executive
David Knox
said investments in liquefied natural gas were already opening up new supply channels for onshore users.

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Federal Resources Minister
Martin Ferguson
has previously backed the view that ample supplies were available for local users, and rejected any need for reserving gas.

“The government believes in allowing the market to adjust to new dynamics rather than trying to constrain price or supply through short-sighted intervention," Mr Ferguson told an industry conference on November 21.

He pointed to the high domestic gas prices in Western Australia, which operates gas reservation, as evidence such measures don’t work.